Ryanair boss says BA will encounter ownership problems after Brexit
Ryanair boss Michael O’Leary said he expects a significant reduction in aviation capacity after Covid that could lead to a threat of higher fares.
He cited the demise of operators like Thomas Cook and Flybe and big reductions in capacity by former flag carriers like Lufthansa and Al Italia.
He said there had been a “a big capacity shake out in Europe” with some airlines wanting to “come back with less capacity and much higher prices”, after the pandemic.
Ryanair is looking to add capacity through its latest Boeing Max jet order, announced last week, he said.
“Unless we add additional capacity, then fares will rise,” he said yesterday, speaking at an event organised by Eurocontrol, an intergovernmental aviation agency.
Mr O’Leary also said rival British Airways (BA) could struggle to be recognised as a European Union airline after the Brexit transition period ends on December 31.
“I’m not sure in a post-Brexit scenario BA can remain a member of IAG,” he said.
France and Germany will insist on the strict application of EU ownership rules in relation to IAG, which owns BA as well as Aer Lingus and Iberian Airlines.
EU rules state that airlines must be at least 50pc owned by EU nationals or risk losing their operating licences.
IAG’s group parent is a Spanish-registered company headquartered in England and has a significant UK shareholder base, partly as a result of the absorption of BA.
In 2019, as the previous Brexit deadline approached, IAG made moves to limit ownership of the airline group by non-European Union shareholders to 47.5pc.
It imposed restrictions on the rights of non-EU investors but stopped short of banning UK-based investors from buying shares.
Ryanair, which has a listing on the London Stock Exchange and is historically around 20pc UK-owned, announced its own plans to Brexit-proof its status as a European airline last year too.
It said it will bar UK nationals from acquiring new shares in the company and will strip some rights including to attend and vote at company meetings from UK and other non-EU shareholders in the event of a hard Brexit.
The structure will ensure Ryanair remains majority EU-controlled.